AUTHORIZATION TO PROCEED
This Authorization to Proceed is entered into as of the date set forth
below by and between Baywood International, Inc. ("Baywood") and Abacus Capital,
L.L.C. ("Abacus") with respect to the following.
A. Baywood and Abacus have had preliminary discussions with respect to a
transaction (the "Transaction"), whereby Baywood, Abacus and additional parties,
as yet unidentified, would form an acquisition company (the "Company") to
acquire a target company.
B. Baywood desires that these discussions proceed with the intent to
finalize formation of the Company and the basic terms of the Transaction with
Abacus, and Abacus is willing to proceed on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions set forth below, and intending to be legally bound, the parties
hereby agree as follows:
1. DEPOSIT. In consideration of Abacus' agreement to continue negotiations
with respect to the Transaction and to have documentation drawn by counsel to
effectuate the Transaction, Baywood hereby agrees to deposit with Xxxxxxx &
Xxxxx, P.L.L.C., Ten Thousand Dollars ($10,000) (the "Deposit") to be held
pursuant to the terms of the Safekeeping Agreement attached as Exhibit A hereto.
2. DOCUMENTATION. Abacus agrees to have drafted the documentation to
further negotiate and finalize the Transaction, and to deliver initial drafts of
such documentation to Baywood within five (5) business days after receipt of the
Deposit.
3. FINALIZATION OF TRANSACTION; TERMINATION OF AGREEMENT. Upon delivery of
the above-referenced documentation, Baywood and Abacus shall negotiate in good
faith toward finalization of the Transaction. If, within thirty days thereafter,
for any reason the parties or either of them are unable to reach final agreement
with respect to the Transaction, then, unless the parties agree otherwise, this
Agreement shall terminate.
(a) Upon termination of this Agreement, Baywood shall be refunded one-half
of the Deposit, without interest, or $5,000, and Abacus shall receive the
remaining one-half.
(b) If the Transaction is finalized, the full amount of the Deposit shall
be applied to the purchase by Baywood of stock in the Company.
(c) If the Transaction is finalized and Baywood fails to close the
acquisition of stock in the Company, this Agreement shall terminate and the
entire Deposit shall be payable to Abacus.
4. ACKNOWLEDGMENTS OF REPRESENTATION. The parties acknowledge and accept
that Xxxxxxx & Biagi, P.L.L.C. ("M&B") is counsel for Abacus. In the event of
any dispute hereunder, Baywood agrees that M&B shall not be disqualified from
continuing to represent Abacus as a result of its involvement with this
transaction.
5. DISBURSEMENTS FROM SAFEKEEPING. During the term of this Agreement,
Abacus shall be permitted to direct disbursements from the Deposit (and out of
Safekeeping), to a maximum aggregate of $5,000, to M&B for services rendered in
connection with the Transaction and drafting of the documentation in connection
therewith.
IN WITNESS WHEREOF the parties hereby execute this Authorization to Proceed
this 27th day of July, 1998.
ABACUS CAPITAL, L.L.C. BAYWOOD INTERNATIONAL, INC.
/s/ Xxxxx X. Xxxxx /s/ Xxxx Xxxxxxxxxx
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Xxxxx X. Xxxxx, Manager Xxxx Xxxxxxxxxx, President/CEO
